Tuesday, December 26, 2006

Come on Down

The Stockton Record reports double-digit price declines for San Joaquin County:

The Price isn’t right

The median home price in San Joaquin County has dropped 13 percent since January, as free-market gravity took hold of the Valley's once-booming real estate industry.

But that still is not enough to make owning a home affordable to thousands of San Joaquin County residents. They still cannot buy a home in an area where the median home price had more than doubled from 2000 to 2004. Such prices mean the average family in the county still cannot afford 95 out of every 100 homes on the market, according to a study released last month.

In 2000, the median - or the midway point between the lowest and highest - price for a home in San Joaquin County was $133,000. By 2004, it had more than doubled to $280,000. At its peak in January, it was $385,000, according to Coldwell Banker Grupe/Trendgraphix.
Now that home prices are sinking each month, working-class families and housing activists are talking about taking back the local real estate market. And some are predicting the floor for prices is a very long way down.

"It's looking more promising than it has in five years," said Fred Sheil, who, along with Stockton resident Larry Johnson, builds and rehabilitates homes for local low-income families. "It's going to come down to where working families can afford to buy a house again."

His optimism might be strong, but it is shared by few: The county's median home price would have to drop another 25 percent to reach the $250,000 level that would be affordable to families earning less than $50,000 a year.
But Sheil believes 2006 is just a prelude to an even greater decline that will bring real estate back on par with the county's wages. If and when that happens, Sheil said, fewer people will have to look for help to find a home. "They've run out of people that can afford to buy a $500,000 home," Sheil said. "Who else are they going to sell to?"
TrendGraphix graphs for San Joaquin County are available here (link also on right under "Central Valley").


Anonymous said...

I'm sure the realtor-industrial complex has some responses to these vicious media attacks that are driving their business down.

I can see Ms. Appleton-Young and her ilk stringing their happy talk words together now....

"Regional softness in the market is not typical of the overall market... Has anyone mentioned that NOW is a great time to buy."

"The softness of the soft-landing I predicted is a bit softer than I had originally expected...more like soft-serve ice cream... Did I mention that NOW is a great time to BUY a home."

"As soon as the greedy, good-for-nothing buyers, get off their kiesters and start buying then I'll sell my POS investment house to the next sucker... whoops, is this microphone on? I meant, NOW IS A GREAT TIME TO BUY A HOME!"

Anonymous said...

I think Stockton is probobly one of the worst case scenarios for the bubble-collapse for 3 reasons. First it seems to me that Stockton was sort of a latecomer to to the bottom of the pyramid. We didnt see the same appreciation much of California did. I was working on Spanos park in the early 90's (yes Spanos park was started around 1989) but it took almost 10 years for Spanos park West (West side of thornton road) to sell out. In 1999 you could still get a 3bd 2ba 1800-2200 sq ft. home for UNDER 150K. California Homes was selling homes in Spanos park west for 117K in 1998!!! (think uber cheap trim level though, ala K&B on steroids). So, as we saw rapid appreciation for only a short time the drop will probobly be much more severe and and abrupt -and the evidence supports this- foreclosures are second only to Placer county's 200% rate to our 178% YOY increses
Secondly, Stockton has an extremely high crime rate, indeed one of the highest in the nation. ways has, always will. My buddy is a sherriff detective and he told me that the reason (tactfully stepping around the racial demographics, which are the real reason, IMO) it's so bad here is that the state prisons release most of their inmates in the SJ valley because no other counties will tolerate it. (nimbyism at its best/worst)
Third, we, like SAcramento (only worse) we have NO real job base save for agriculture. At least Sac has the uber state government morass of lazy,unproductive workers
with overpaid, protected jobs. The poverty here is and has been positively third world level. One other thing is going to be positively catastrophic is that much of the new building has been West of I5 on peat dirt land, some of which is below sea level. This is a disaster that will make NO/Katrina look like a beach party.

Fortunately the Stockton city government is aware of the problem and has an emergency plan to block/dam up the I5 underpasses at Weston Ranch/Charter/March/Ben Holt and 8mile road. Making INTERSTATE 5 the new Levee protecting old stockton, but abandoning all those new homesand strip malls built in the stupidest location since the 9th ward of NOLA!

Anecdotally the house next door to me has been on the market for 3 months now- only a smal handful of prospective buyers has even taken a look at it. NOBODY even came to the last open house!

Anonymous said...

Lander, Thanks for the San Joaquin prices link!